Preparing your report for the year. Public Sector Salary Disclosure Act Guide

Transcription

1 Preparing your report for the year 2005 Public Sector Salary Disclosure Act 2005 Guide

2 Table of Contents Page Introduction 3 Quick Guide to Public Sector Salary Disclosure 4 Section 1: Is my organization covered under PSSDA? 1.1 Public Sector Organizations specifically listed as "Employers" in the Act 1.2 Organizations considered as "Employers" if they meet the funding condition 1.3 Organizations excluded from the Act 1.4 The funding condition 5 Section 2: How do I know if my organization has any employee whose salary should be disclosed? 2.1 Employees 2.2 Calculation of the salary paid 2.3 Difference between salary rate and salary paid 2.4 No employee salaries to disclose Section 3: How does my organization disclose the employees earning $100,000 and more? 3.1 Record of Employees 2005 Salaries and Benefits 3.2 How to complete the Excel Template Section 4: What should I do with my disclosure record or Statement of No Employee Salaries to Disclose? 4.1 Submit the report to the funding ministry 4.2 Make the Record or Statement available on your premises Section 5: What are my other responsibilities as an employer under PSSDA? 5.1 Inform your employees 5.2 Answering questions on the components of the salary paid or taxable benefits 5.3 Privacy of individuals and personal information 5.4 Penalties for not making the required disclosure 5.5 Deadline for disclosure 13 Section 6: The Public Sector Salary Disclosure Amendment Act, Salary disclosure in annual reports 6.2 Hydro One and Ontario Power Generation salary disclosure Appendices 15 Preparing your report for Public Sector Salary Disclosure Act 2

3 Introduction The Public Sector Salary Disclosure Act was passed in 1996 to make Ontario's broader public sector more open and accountable to taxpayers. The Public Sector Salary Disclosure Act (PSSDA) requires organizations that receive public funding from the Government of Ontario to disclose annually the names, positions, salaries and total taxable benefits of employees paid $100,000 or more in a year. The Act covers the Government of Ontario, Crown Agencies, Municipalities, Hospitals, Boards of Public Health, School Boards, Universities, Colleges, Ontario Power Generation, Hydro One, and other public sector employers who receive a significant level of funding from the provincial government. The main requirement for the organizations covered by the Act is to make their disclosure or their statement of no employee salaries to disclose available to the public by March 31. The organizations are also required to send their disclosure or statement to their funding ministry by March 31. The purpose of this guide is to: 1. help employers determine if they are covered under the Act 2. explain what to disclose, how salaries and total taxable benefits are calculated and how to prepare the disclosure report 3. explain how to comply with the legislative requirements If you have any questions after reading this guide, please contact your responsible ministry. A list of contacts, phone numbers and addresses is available at the end of the guide. Preparing your report for Public Sector Salary Disclosure Act 3

4 Quick Guide to Public Sector Salary Disclosure YES Is this a private-sector for-profit organizat ion? NO Is this organization or type of organization named specifically in the Act or Regulations? YES NO Did this organization get at least $1 million during the year from the Province? YES NO NO Did this organization get at least $120,000 during the year from the Province? YES Not covered by Act; no action needed By March 31, Organization must make available to the public a statement that no employee salary was $100,000 or more, and provide a copy to funding ministries. NO NO Did funding from the Province account for 10% or more of revenues? YES Did this organization pay anyone a salary of $100,000 or more last year? YES By March 31, Organization must make available to the public a Record of names, positions, salaries and taxable benefits of employees paid $100,000 or more, and provide a copy to funding ministries. Preparing your report for Public Sector Salary Disclosure Act 4

5 Section 1: Is my organization covered under PSSDA? This section explains which organizations are covered and the funding condition. 1.1 Public Sector Organizations specifically listed as "Employers" in the Act All these organizations are covered under the PSSDA: The Crown in Right of Ontario (the Provincial Government) Municipalities School Boards Universities Colleges of Applied Arts and Technology Post secondary institutions in Ontario, the enrolments of which are counted for purposes of calculating annual operating grants entitlements Hospitals (as defined in the Public Hospital Act, Private Hospital Act and Community Psychiatric Hospitals Act) Boards of Health Agencies established by the Province of Ontario Authorities, boards, commissions, corporations, offices and organizations where a majority of the directors, members or officers are appointed under the authority of the Lieutenant Governor in Council by Order in Council Office of the Lieutenant Governor in Council, Office of the Assembly, members of the Assembly and offices of persons appointed on an address of the Assembly Hydro One Inc., Ontario Power Generation Inc. and each of their subsidiaries 1.2 Organizations considered as "Employers" if they meet the funding condition Some organizations are covered only if they received a significant amount of funding from the government during the year: A local board of a municipality Corporations, with share capital, where at least 90% of the issued shares are owned or held by any of the organizations listed above and every wholly-owned subsidiary thereof Corporations without share capital, the majority of whose members, directors or officers are appointed or chosen by any of the organizations listed above and every wholly-owned subsidiary thereof Not-for-profit organizations receiving funding from the Province 1.3 Organizations excluded from the Act The following organizations are not covered under the Act: Organizations that carry on their activities for the purpose of gain or profit to their members or shareholders Not-for-profit organizations, local boards of a municipality, corporations owned or controlled by the public sector organizations listed above (in section 1.1), if they do not meet the funding condition. If your organization does not meet the definition of "employer" under the Act, the Act does not apply to you, and no disclosure is necessary. Preparing your report for Public Sector Salary Disclosure Act 5

6 1.4 The funding condition Some organizations (such as not-for-profit organizations, local boards of municipalities, and corporations owned or controlled by the public sector organizations listed in the Act) are covered if they received funding from the government as detailed below. Generally, funding means Transfer Payments. A transfer payment is a transfer of money to an organization for which the government making the transfer does not: receive goods or services directly in return, as would occur in a purchase or sale transaction; expect to be repaid in the future, as would be expected in the case of a loan; or expect a financial return, as would be expected in the case of an investment. The major types of transfer payments are entitlements, shared cost agreements and grants. Funding received from the Government of Ontario in 2005 Under $120,000 At least $120,000 but under $1 million $1 million and more Total Funding Requirements under PSSDA The organization is not covered under PSSDA and does not have to disclose. The organization is covered under PSSDA if the funding represents 10 per cent or more of the organization's gross revenues for the year. In that case, the organization must disclose. If the funding represents less than 10 per cent of the organization's gross revenues for the year, the organization is not required to disclose. In this case, Management Board of Cabinet can require evidence that the funding is less than 10 per cent of the organization's gross revenues for the year. Organization is covered under PSSDA and must disclose. An organization may receive funding from more than one ministry. Ultimately, it is the responsibility of the organization to determine whether it meets the funding criteria since the Act refers to total funding from the government, not just from one ministry. Preparing your report for Public Sector Salary Disclosure Act 6

7 Section 2: How do I know if my organization has any employees whose salary should be disclosed? This section explains how to identify the employees captured by the Act and how to calculate their salary paid. Ultimately, it is the organization that will know if it has to either disclose employees or complete a statement of no employee salaries to disclose. 2.1 Employees Everyone to whom your organization issues a T4 slip is considered an employee. This includes a person who is a director or officer of an employer and someone who is elected or appointed under the authority of an Act of Ontario. Employees on secondment are considered employees of the organization that issued their T4 even if the organization is reimbursed for all or part of the employee's salary. You will find more details on how to disclose "seconded" employees in section 3.2(5). 2.2 Calculation of the salary paid It is only when an employee's salary is at least $100,000 that an organization is required to disclose the salary amount and the value of the taxable benefits. The $100,000 salary cutoff does not include taxable benefits. The definition of salary in PSSDA is tied to the Income Tax Act. Therefore, it is necessary to use specific boxes from the T4 slip to calculate the salary paid and the taxable benefits. Salary Calculation Salary Paid = (Box 14 of T4 slip) - (Boxes of T4 slip) Do not include amounts listed on the T4A slip when calculating the salary paid. Preparing your report for Public Sector Salary Disclosure Act 7

8 2.3 Difference between salary rate and salary paid The salary paid on the T4 slip may not be the same as the salary rate for the position, or the salary earned in There may be differences due to payments such as retroactive pay, grievances prior to 2005, etc. Payment for overtime, which is usually paid on top of the annual salary, pushes the amount of salary paid above the annual salary rate. 2.4 No employee salaries to disclose An employer covered under the Act is required to produce a Statement of No Employee Salaries to Disclose" if it has no employees to disclose (i.e. no employee was paid $100,000 or more). Submit the completed statement to the responsible ministry. There is a copy of the form at the end of this guide. This form is available on the Ministry of Finance website at: Submit the statement by fax or to the funding ministry or ministries by March 13, Section 4 of this guide provides more information on where to send your statement. A list of ministry contacts is available at the end of this guide. Preparing your report for Public Sector Salary Disclosure Act 8

9 Section 3: How does my organization disclose the employees earning $100,000 or more? This section explains how to complete the Record of Employees' 2005 Salaries and Benefits when an organization has employees to disclose. 3.1 Record of Employees' 2005 Salaries and Benefits If your organization has employees who were paid $100,000 or more, complete a "Record of Employees' 2005 Salaries and Benefits". The template is available at: Submit the record to the funding ministry or ministries preferably in electronic format by March 13, Section 4 explains where to send the record. A list of ministry contacts is also available at the end of the guide. 3.2 How to complete the Excel Template The Record of Employees' 2005 Salaries and Benefits consists of seven fields that need to be completed for each employee. 1. Sector Choose from one of the following in the dropdown menu: Government of Ontario o Ministries o Legislative Assembly and Offices o Judiciary Example: Government of Ontario - Ministries Crown Agencies Municipalities and Services Hospitals and Boards of Public Health School Boards Universities Colleges Hydro One and Ontario Power Generation Other Public Sector Employers 2. Employer Provide the legal name of your organization. Please be consistent with the name appearing in last year's disclosure, if applicable. Use approved abbreviations only when space is an issue (i.e. 39-character limit has been exceeded) from the list that is available at the end of this guide. 3. Surname The employee's surname, as shown on the 2005 T4 Slip. Do not use "Estate of" in the case where an employee is deceased. Use upper case text. Insert a period after initials in the name. Preparing your report for Public Sector Salary Disclosure Act 9

10 4. Given name The employee's given name, as shown on the 2005 T4 Slip. Do not use "Estate of" in the case where an employee is deceased. Use upper case text. Insert a period after initials in the name. 5. Position Title Use the position title as at December 31, If the employee was no longer with the employer at the end of 2005, then use the position title last held by the employee. This field is restricted to 40 characters. Use approved abbreviations only when space is an issue (i.e. 40-character limit has been exceeded) from the list that is available at the end of this guide. If the position title cannot be shortened to 40 characters, insert the full, unabbreviated title into a comment box for that cell (select Insert from the menu bar, then select Comment). This cell will be abbreviated accordingly for publication. Some expressions should not be used in the position title as they give extra information that is not required by the Act. Adding these expressions to a position title is an infringement of the Freedom of Information and Protection of Privacy Act (FIPPA). Some examples are: o Do not use the words "temporary" or "former". o Do not use the word "Acting". The only exception is when there is an official contract or paper trail which officially designates the position as acting. o Do not use the word "seconded". Employers can use the expression only if they receive a written consent from their employee. 6. Salary Paid Amount paid by the employer to the employee in To calculate the salary paid subtract boxes 30, 32, 34, 36, 38, and 40 from box 14 of the T4 slip. Do not provide any breakdown of the components of the salary. Salary Paid = (Box 14) - (Boxes ) 7. Taxable Benefits Amount paid by the employer to the employee in 2005 as reported on the T4 slip. (Total of boxes 30, 32, 34, 36 and 40). Do not provide any breakdown of the specific taxable benefits. Taxable Benefits = Boxes Preparing your report for Public Sector Salary Disclosure Act 10

11 Examples of fictitious situations and sample disclosures have been provided below for illustration purposes only. Example 1 Jane Doe is the Chief of Staff for Red Hospital. In 2005 she earned a regular salary of $97,000 and taxable benefits of $ She also received a retroactive salary payment of $4,500 for 2003, as a result of settlement of negotiations for a salary increase beginning in Jane s T4 for 2005 reflects a salary of $101,500 ($97,000 + $4,500) in the year Jane Doe s T4: Box 14 amount is $102, Box 30= 0, Box 32= $525.16, Box 34=0, 36, Box 38=0 and Box 40=0 Salary paid = (Box 14) - (Boxes ) = $102, $525.16= $101,500 Taxable Benefits = Boxes = = $ Example 2 Rose Lee is a registered nurse and a permanent employee at the Red Hospital. She is on a secondment to the Blue Hospital to work on a special project from May 2005 to December Rose is still paid by Red Hospital during that time but Blue Hospital reimburses part of her salary to Red Hospital. At the end of the year: Red Hospital issues a T4 for Rose for The calculation of her salary paid for PSSDA is over $100,000. Rose's position title at Red Hospital is registered nurse but the pay system reported her as "registered nurse seconded to Blue Hospital". Blue hospital does not issue a T4 for Nurse Rose. In this case, Rose will be disclosed under Red Hospital. Her position title will be registered nurse. If Red hospital wants to mention that Rose is on secondment with Blue Hospital, Rose needs to give a written consent. If she accepts, her position title will be " registered nurse (seconded to Blue Hospital)" Sample record of disclosure RECORD OF EMPLOYEES' 2005 SALARIES AND BENEFITS Sector Employer Surname Given Name Position Salary Paid Taxable Benefits Hospitals and Boards of Public Health Hospitals and Boards of Public Health Red Hospital Red Hospital DOE JANE Chief of Staff $101, $ LEE ROSE Registered Nurse $101, $ I certify that the information provided on this Record is correct in accordance with the Public Sector Salary Disclosure Act, Name Phone Number Position Title Date Prepared under the Public Sector Salary Disclosure Act, 1996 Preparing your report for Public Sector Salary Disclosure Act 11

12 Section 4: What should I do with my disclosure Record or Statement of No Employee Salaries to Disclose? This section explains the two requirements for disclosure under the Act. 4.1 Submit the report to the funding ministry paper copy or electronically Submit your Record or Statement to your funding ministry as shown below. A list of contacts for each ministry is available at the end of this guide. Employer Agencies and other bodies owned or controlled by the Provincial Government Municipalities and Services School Boards Universities Colleges Hospitals Boards of Health Ministry Receiving Record Every ministry that provided funding. Ministry of Municipal Affairs and Housing Ministry of Education Ministry of Training, Colleges and Universities Ministry of Training, Colleges and Universities Ministry of Health and Long-Term Care Ministry of Health and Long-Term Care Hydro One Inc., Ontario Power Generation Ministry of Energy Inc. and each of their subsidiaries Employers subject to the funding condition Every ministry that provided funding. You may have to report to more than one ministry. Please submit your record by March 13, 2006 to your funding ministry. Each year the Ministry of Finance publishes a compendium of statements and records. To ensure your record or statement is published in the compendium, please submit it by March 13, The Ministry of Finance also publishes an addendum a few months after the release of the compendium to include records and statements received after the production of the compendium. 4.2 Make the Record or Statement available on the premises of your head office Your organization s record or statement must be available for inspection without charge during your normal business hours from March 31 to December 31 of the same year. Copies are required to be available on request during and after the above period. You may charge twenty (20) cents per page for providing a copy. However, you may waive this fee at your discretion. No separate fee is allowed for postage. Preparing your report for Public Sector Salary Disclosure Act 12

13 Section 5: What are my other responsibilities as an employer under PSSDA? This section explains how to deal with some of your employees' questions or concerns regarding the disclosure of their salaries. It also informs the employers of their responsibilities. 5.1 Inform your employees As a courtesy, we recommend that you tell your employees about the disclosure of their salaries before you release the information. You might want to refer them to the Ministry of Finance website where they will find more information on the PSSDA Answering questions on the components of the salary paid or taxable benefits The Act authorizes employers to disclose the value of the salary paid and the taxable benefits as defined by the Canada Revenue Agency. The Act does not authorize employers to disclose what is specifically included in the salary paid or the specifics of the benefits. 5.3 Privacy of individuals and personal information Employers cannot be held liable for making this disclosure if they reasonably believed that they were required to make the disclosure. A non-disclosure clause in an employment contract cannot be used to avoid disclosure. If you have any doubts about what you are required to disclose, check with your funding ministry. The Act only covers information that it specifically authorizes employers to release, as explained in section 3 of this guide. 5.4 Penalties for not making the required disclosure The Act allows Management Board of Cabinet to direct a ministry to withhold part or all of the transfer payment to an employer if the employer has failed to comply with the Act. The funds will be paid once the employer complies. If the employer fails to comply after one year (by March 31 of the following year) the employer ceases to be entitled to the payment withheld. Management Board of Cabinet can also withhold funds if an organization fails to provide evidence regarding revenues under the funding criteria (i.e. whether at least 10 per cent of gross revenues came from the Province or not). 5.5 Deadline for disclosure Employers covered under the Act must make the Record of Employees' 2005 Salaries and Benefits or the Statement of No Employee Salaries to Disclose public by March 31. Send your record or statement by March 13, 2006 to ensure it is published in the compendium. Preparing your report for Public Sector Salary Disclosure Act 13

14 Section 6: The Public Sector Salary Disclosure Amendment Act, 2004 The Public Sector Salary Disclosure Amendment Act, 2004 has been in effect since April15, Salary disclosure in annual reports Employers are relieved from having to include salary disclosure with their annual reports if that disclosure is made available on a public website (a corporate website or the Ministry of Finance website). Prior to the amendment, the Public Sector Salary Disclosure Act required an employer, which normally issues an annual report, to include the salary disclosure with their annual report. 6.2 Hydro One and Ontario Power Generation salary disclosure This amendment specified that Hydro One Inc., Ontario Power Generation Inc. and each of their subsidiaries are part of the public sector and designated them as public sector employers for the purposes of the Act. Hydro One Inc., Ontario Power Generation Inc. and each of their subsidiaries are required to provide salary disclosure to the Ministry of Energy. This applies for 2004 and future years. Preparing your report for Public Sector Salary Disclosure Act 14

15 Appendices For additional information, please consult the Public Sector Salary Disclosure section of the Ministry of Finance website: The Public Sector Salary Disclosure Act, 1996 and the related Regulations are available on the Ontario E-Laws website List of Contacts Ministry Address Phone Number Fax Number Agriculture, Food and Rural Affairs T.B.D Attorney General Children and Youth Services T.B.D Citizenship and Immigration Community and Social Services T.B.D Community Safety and Correctional Services Culture Democratic Renewal Secretariat Economic Development and Trade T.B.D Education Energy T.B.D. T.B.D. Environment Finance T.B.D Francophone Affairs Government Services Health and Long-Term Care Health Promotion T.B.D. T.B.D. T.B.D. Intergovernmental Affairs T.B.D Labour T.B.D Municipal Affairs and Housing Natural Resources T.B.D Northern Development and Mines T.B.D Ontario Secretariat for Aboriginal Affairs T.B.D Public Infrastructure Renewal T.B.D. T.B.D. Tourism Training, Colleges and Universities Transportation Preparing your report for Public Sector Salary Disclosure Act 15

16 List of approved abbreviations To ensure consistency throughout the compendium, use the following abbreviations. Common Words Administration Assessment Assistant Assistant Deputy Minister Associate Board of Education Business Catholic District School Board Catholic School District Centre/Center Chief Administrative Officer Chief Executive Officer Chief Financial Officer Chief Information Officer Chief Nursing Officer Chief Operational Officer Children s Aid Society Community Care Access Centre Community Health Centre Control Co-ordinator Corporate Delivery Deputy Development Director District Health Council District School Board Division Executive Abbreviation Admin. Assess. Asst. ADM Assoc. BE Bus. CDSB CSD Ctr. CAO CEO CFO CIO CNO COO CAS CCAC CHS Cntrl. Co-ord. Corp. Del. Dep. Dev. Dir. DHC DSB Div. Exec. Preparing your report for Public Sector Salary Disclosure Act 16

17 Common Words Executive Vice-President Facilities Family and Children s Services General Manager Health Human Resources Incorporated Information Information Services Information Technology Limited Long-Term Care Management Manager Market Mental Health Ontario Operations Planning President Professor Program Project Public Health Department Quality Assurance Research and Development Roman Catholic Separate School Board Saint/Sainte School Separate School Board Sergeant Services Technology Vice President Abbreviation EVP Facil. FACS GM Hlth. HR Inc. Info. IS IT Ltd. LTC Mgmt. Mgr. Mrkt. MH Ont. Ops. Plng. Pres. Prof. Prog. Proj. PHD QA R&D RCSSB St/Ste Sch. SSB Sgt. Srvcs. Tech. VP Preparing your report for Public Sector Salary Disclosure Act 17

18 STATEMENT OF NO EMPLOYEE SALARIES TO DISCLOSE (name of organization) In 2005, no employees were paid a salary, as defined in the Public Sector Salary Disclosure Act, 1996, of $100,000 or more. Name Position Title (of highest ranking Officer of the Employer) Signature Date Prepared under the Public Sector Salary Disclosure Act, 1996 Preparing your report for Public Sector Salary Disclosure Act 18